For Denver Nuggets fans, Kentavious Caldwell-Pope leaving for nothing in free agency in a few weeks could be a nightmare scenario.

For the Denver Nuggets themselves, it’s more complicated than that.

When the Nuggets acquired Caldwell-Pope (and Ish Smith) during the 2022 offseason from the Washington Wizards by trading Will Barton and Monte Morris, the deal was immediately a home run. It may not have been the most “valuable” trade from a transaction perspective, but Caldwell-Pope was exactly what the Nuggets needed.

A perfect role player to add to any squad, Caldwell-Pope’s three-point shooting, defensive impact, and veteran savvy all contributed to Denver’s belief that he would complete their starting five. Calvin Booth was so confident, in fact, that the Nuggets and Caldwell-Pope agreed to a contract extension after the trade to add an extra year onto his deal.

The Nuggets and Caldwell-Pope got exactly what they needed from the last two seasons. The team won its first championship in franchise history, and Caldwell-Pope added a second ring to his collection, one of the few players in NBA history that can say as much. His contributions to the Nuggets cannot go understated during that time, from guarding players like Devin Booker and Jimmy Butler in the 2023 playoffs to nearly earning All-Defensive honors this past season.

And now, the hardest part begins again: contract negotiations. The Nuggets starting shooting guard has a player option he’s expected to decline by June 29th. He will explore free agency and look to capitalize on the impactful work and service he’s put in, perhaps for the last time in the prime of his career.

For all of the reasons stated above, Caldwell-Pope is not just valuable to the Nuggets, but to any team hoping to add a player of his talent and experience. At 31 years old, Caldwell-Pope is entering his 12th season having played at least 2,000 minutes in every season except for three: his rookie year, and the two years shortened by Covid-19. His steadiness as a complementary wing is worth a raise, and teams will be willing to offer him a serious contract, if only to get him out of Denver and away from a championship contender.

This is the natural life cycle of any contender. A team gets really good, and their players get really expensive in turn. When stars are up for contract, a team looks to retain those stars at any cost. When role players are up for contract, it gets dicey. The Nuggets, next season alone, have over $147 million committed to Nikola Jokic, Jamal Murray, Michael Porter Jr., and Aaron Gordon. The salary cap is slated to be $141 million. That means the team, even without accounting for Caldwell-Pope, is already in a difficult spot, trying to account for 11 other roster spots while attempting to build the best team they possibly can.

Last season, Bruce Brown departed because the Nuggets couldn’t legally bring him back at the dollar figure he ultimately received. They didn’t have his bird rights. That’s not the case for Caldwell-Pope. They have his full bird rights, which means they’re legally allowed to pay Caldwell-Pope whatever they want to retain his services. Caldwell-Pope and his agency, Rich Paul of Klutch Sports, surely know that and hope to capitalize on what might be his last major pay day.

Unfortunately, writing a blank check, while certainly appealing to Caldwell-Pope, is not in the best interest of the Nuggets competitively. The second tax apron, a new stipulation agreed upon in the Collective Bargaining Agreement, isn’t just a financial burden, but a competitive one. The Nuggets will not be able to make competitive trades if they are over the second apron. They will not be able to use the Taxpayer Mid-Level Exception in free agency. Even their first round draft pick in 2032 will be “frozen” if they finish the end of the 2024-25 season over the second apron, meaning they cannot use it in future trades. If they stay above the second apron in three of the next five seasons, that 2032 first round draft pick will be automatically sent to the end of the first round, regardless of Denver’s record.

So, the penalties are fierce, and the decision to re-sign Caldwell-Pope is effectively a decision about the second apron. The money number for the second apron is currently set at $189.45 million. Without Caldwell-Pope’s $15.4 million player option on the books, the Nuggets have committed $175.45 million to 12 players, including a $5.2 million player option to Reggie Jackson and a $2.4 million club option to Vlatko Čančar. That leaves roughly $14 million to spend between three players without going over, which gives Denver some flexibility, including access to that Taxpayer Mid-Level Exception and the ability to aggregate salaries in trades.

If Caldwell-Pope were to opt in to the player option of $15.4 million, the Nuggets will be at $190.85 million, already over the second apron with two more roster spots to fill. That’s an unlikely option for Caldwell-Pope’s long term security though, playing on just a one-year contract.

The most likely path is that Caldwell-Pope opts out and the Nuggets look to re-sign him; however, the Nuggets will have to stave off other teams from poaching him. The Philadelphia 76ers, Orlando Magic, and Los Angeles Lakers are all expected to have interest, and that will most likely create a bidding war for the veteran’s services. Expect the annual average value of Caldwell-Pope’s next contract to be in line with contracts signed by Grayson Allen (Four years, $70 million) and Josh Hart (Four years, $80.9 million). Add in the new TV contract and two championship rings as tax, and it’s possible Caldwell-Pope’s deal could exceed $20 million annually.

Let’s say the Nuggets sign Caldwell-Pope to a Four-Year, $80 million contract, locking him into being a Nugget for the rest of his upper prime years and beyond. Here’s what the Nuggets salary cap sheet would look like for the next five seasons:

Salary cap numbers and information via Spotrac

The Nuggets would effectively become a second apron team unless Reggie Jackson opts out of his player option and they did a salary dump of Zeke Nnaji’s contract. Either that scenario, or the Nuggets trade one of Murray, Porter, or Gordon and break up their starting lineup anyway. Murray’s contract situation actually makes him the most reasonable candidate to be moved, but good luck finding a real replacement for Jamal Murray in that case. There aren’t many teams that will give equitable value for Porter or Gordon on their contracts either.

If the Nuggets don’t break up the starting five and stay a second apron team, they can only sign outside free agents to minimum contracts, so they better be sure that this group is good enough to win a championship now and going forward. Because if the Nuggets failed to win a title next year, it’s not easy to change anything for the better. The starters will likely be locked in, but the bench will be cheap, filled with rookie contracts and minimum deals, and the only hope of real improvement will come from internal gains rather than external. That’s a lot of pressure to put on a roster, but the Nuggets wouldn’t have the financial flexibility (or the trade assets) to do anything else.

Signing Caldwell-Pope to a market value contract is effectively a bet on the starting five being better next year than they were in these playoffs. Jamal Murray will be better, so long as he stays healthy. Michael Porter Jr. should be better, but he just had the healthiest season of his career. Expecting similar performance is always dangerous given his history. Aaron Gordon’s game is at its peak, so he’s not one to worry about. Jokic is in a similar boat.

Can that quintet be better next year than they were this year? Sure. Is it the right bet to make going forward? I don’t know. It puts pressure on the Nuggets finding the right bench players to fill in the gaps. I’ve already written and discussed a Bruce Brown replacement at Sixth Man. How about a center that can play extended minutes in the playoffs? If not that, then a big forward to replicate Jeff Green’s role? Can the Nuggets fill those spots while also retaining Caldwell-Pope and only having the 28th overall pick in the draft and veteran minimum contracts at their disposal? It seems unlikely.

All of these factors are being weighed by the coaching staff, front office, and ownership. There will be a collaborative effort in deciding what decisions should be made. If it were up to Michael Malone, I’d expect he’d want Caldwell-Pope back and for the Nuggets to find another way to bolster their bench. If it were up to Josh Kroenke, he’d probably weigh the competitive and financial limitations of the second apron. Ultimately, the decision will be a joint effort, but Calvin Booth should have the final say. Booth knows how important Caldwell-Pope is. He also knows the Nuggets can’t pay the starting shooting guard an unlimited amount of money if Denver’s to maximize their long term future.

This moment in time has the opportunity to be the biggest pivot point the Nuggets have faced in two seasons. Caldwell-Pope might be a part of it. If he is, Denver’s order of operations in how they construct their team simplifies greatly.

If he’s not, the Nuggets will be forced to get very creative in replacing him.